Breaking News
0
Ad-Free Version. Upgrade your Investing.com experience. Save up to 40% More details

Exclusive: Washington Prime to file bankruptcy as soon as this week - sources

Stock MarketsJun 13, 2021 05:15AM ET
Saved. See Saved Items.
This article has already been saved in your Saved Items
 
© Reuters.

By Mike Spector

NEW YORK (Reuters) - Mall owner Washington Prime Group (NYSE:WPG) Inc is preparing to seek bankruptcy protection as soon as this week after the COVID-19 pandemic forced it to temporarily close some of its roughly 100 shopping centers across the United States and businesses were unable to pay it rent, people familiar with the matter said.

The Columbus, Ohio-based company, formed in 2014 following a spin-off from mall giant Simon Property Group Inc (NYSE:SPG), owns properties that include open-air town centers and enclosed malls, with roughly a third concentrated in the Midwest. Its tenants include brand-name retailers pushed to the brink by the pandemic, such as J.C. Penney Co Inc, which filed for bankruptcy last year. Other tenants include retailers that borrowed money last year to bolster their finances during the crisis such as Bed Bath & Beyond Inc (NASDAQ:BBBY) and Macy's Inc. (NYSE:M)

The real estate investment trust's consideration of a Chapter 11 court restructuring to rework roughly $4 billion of debt marks the latest company in the broader retail landscape to wilt under a global public health crisis that kept U.S. shoppers home for months on end.

The U.S. economy is now sharply rebounding with more than 140 million Americans fully vaccinated and businesses reopening. Nevertheless, previous government stay-at-home orders and business closures designed to slow the pandemic crushed many retailers' bottom lines, imperiling their ability to pay rent to landlords such as Washington Prime. Other mall owners such as CBL & Associates Properties Inc and Pennsylvania Real Estate Investment (NYSE:PEI) Trust filed for bankruptcy last year.

Washington Prime did not immediately respond to a request for comment.

The company could be put up for sale in concert with the expected bankruptcy filing, one of the sources said. It is in talks for roughly $100 million of so-called debtor-in-possession financing to aid operations during bankruptcy proceedings, the source said.

The size of the financing will depend on whether Washington Prime reaches a debt restructuring deal with creditors before filing for bankruptcy or needs to continue negotiations while navigating court proceedings, in which case it could approach $150 million, the source added.

Washington Prime has said in public filings that it is in talks with creditors to restructure its finances and might need to seek bankruptcy protection.

The company has not yet made a final decision on whether it will seek bankruptcy protection, some of the sources said. The timing of any bankruptcy filing, should one occur, could slip depending on the progress of ongoing talks with creditors, these sources said.

Washington Prime is currently operating under a forbearance agreement with bondholders and lenders that expires Monday (NASDAQ:MNDY) night. The agreement has been extended several times since Washington Prime skipped a $23.2 million interest payment on bonds due Feb. 15.

The discussions have dragged on as negotiators wrestle with Washington Prime's improved business prospects and the potential that creditors might realize better financial recoveries, the sources familiar with the proceedings said. Washington Prime's stock soared earlier this year before falling, and experienced another brief surge in early June.

The talks include investment firm SVPGlobal, among Washington Prime's largest creditors, the sources said.

SVPGlobal declined to comment.

Fallout from the pandemic last year forced Washington Prime to close some properties for a time and relax collection of rent from its tenants, squeezing the mall owner's finances. During the throes of the pandemic in 2020, Washington Prime's rental income plummeted about $127 million from 2019 levels due to the pandemic.

During the first three months of this year, Washington Prime's rental income was off roughly $20 million compared with the same time period in 2020. Its cash flows from operations for the three months ending in March were $3.3 million, a plunge from $10 million during the same time period in 2020.

 

 

Exclusive: Washington Prime to file bankruptcy as soon as this week - sources
 

Related Articles

Add a Comment

Comment Guidelines

We encourage you to use comments to engage with other users, share your perspective and ask questions of authors and each other. However, in order to maintain the high level of discourse we’ve all come to value and expect, please keep the following criteria in mind:  

  •            Enrich the conversation, don’t trash it.

  •           Stay focused and on track. Only post material that’s relevant to the topic being discussed. 

  •           Be respectful. Even negative opinions can be framed positively and diplomatically. Avoid profanity, slander or personal attacks directed at an author or another user. Racism, sexism and other forms of discrimination will not be tolerated.

  • Use standard writing style. Include punctuation and upper and lower cases. Comments that are written in all caps and contain excessive use of symbols will be removed.
  • NOTE: Spam and/or promotional messages and comments containing links will be removed. Phone numbers, email addresses, links to personal or business websites, Skype/Telegram/WhatsApp etc. addresses (including links to groups) will also be removed; self-promotional material or business-related solicitations or PR (ie, contact me for signals/advice etc.), and/or any other comment that contains personal contact specifcs or advertising will be removed as well. In addition, any of the above-mentioned violations may result in suspension of your account.
  • Doxxing. We do not allow any sharing of private or personal contact or other information about any individual or organization. This will result in immediate suspension of the commentor and his or her account.
  • Don’t monopolize the conversation. We appreciate passion and conviction, but we also strongly believe in giving everyone a chance to air their point of view. Therefore, in addition to civil interaction, we expect commenters to offer their opinions succinctly and thoughtfully, but not so repeatedly that others are annoyed or offended. If we receive complaints about individuals who take over a thread or forum, we reserve the right to ban them from the site, without recourse.
  • Only English comments will be allowed.

Perpetrators of spam or abuse will be deleted from the site and prohibited from future registration at Investing.com’s discretion.

Write your thoughts here
 
Are you sure you want to delete this chart?
 
Post
Post also to:
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Thanks for your comment. Please note that all comments are pending until approved by our moderators. It may therefore take some time before it appears on our website.
 
Are you sure you want to delete this chart?
 
Post
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Add Chart to Comment
Confirm Block

Are you sure you want to block %USER_NAME%?

By doing so, you and %USER_NAME% will not be able to see any of each other's Investing.com's posts.

%USER_NAME% was successfully added to your Block List

Since you’ve just unblocked this person, you must wait 48 hours before renewing the block.

Report this comment

I feel that this comment is:

Comment flagged

Thank You!

Your report has been sent to our moderators for review
Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.
Continue with Google
or
Sign up with Email